Thursday, December 18, 2008

Congresswoman Carolyn Maloney has been right in the thick of things as the car bailout mess has been wrestled with, the new credit card regulations have been promulgated, and the agenda for the new Congress is getting sorted out. She would love to have the chance to answer your questions about those issues - or take questions from your listeners. There is a lot of factually incorrect material floating around in the blogospshere about all these enormously important issues and she would love to help keep it all straight.

Since a ton of people will be out doing their Christmas shopping over the weekend - after years of work and pressure from Carolyn - the Fed just put out some new regulations that will put an end to some of the worst of the unfair and deceptive practices, but their regulationss don't go into effect until 2010. Carolyn will be working to craft legislation in the coming Congress to end the worst of the worst prior to 2010. Here is the official release from her office on the subject:

Rep. Carolyn Maloney: "This is a good first step, but consumers can't wait."

In response to today's release of a final rule by the Federal Reserve (Fed), Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA) to ban certain unfair or deceptive acts and practices related to credit cards, Congresswoman Carolyn Maloney (D-NY), author of the Credit Cardholders' Bill of Rights (H.R. 5244) and Chair of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit released the following statement:"As one who's been working for years to bring consumers the protections they need, I'm delighted to see the regulators take substantive action. Finally, these practices have been declared what they are: 'unfair' and 'deceptive.' But while these new rules are a strong first step, I'll be working with my Subcommittee and Chairman Frank to fill any gaps in protections for cardholders. These new rules aren't scheduled to take effect until 2010; Congress should act sooner to protect American consumers by giving credit card protections the permanence and force of law," Maloney said.

"Credit cards are an important financial tool and are a vital part of our economy, but we must allow consumers to make informed decisions regarding interest rates and fees related to their credit cards, and allow competition to drive the credit card markets," Maloney continued.

"I agree with President-elect Obama, who repeatedly campaigned on this issue by saying '...Americans aren't falling into debt because they made an irresponsible decision; they're falling into debt because credit card companies are pushing them over the edge. For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can't afford,'" Maloney said.

"I'll be introducing a new Credit Cardholders' Bill of Rights in the House in the first days of the 111th Congress, along with Sen. Mark Udall (D-CO) in the Senate, who was a vigorous advocate of my bill in the House this session. With the regulators finally acting, and the new Administration's support, Washington should do more for Main Street," Maloney concluded.

Background: H.R. 5244, written by Rep. Carolyn Maloney after a series of roundtables with industry and consumer stakeholders and six public hearings, had 155 bipartisan cosponsors. It passed the House Financial Services Committee with all Democrats supporting. It passed the House on September 23, 2008 on a vote of 312-112; the majority coalition included the support of 81 Republicans. It was not brought to a vote in the Senate. The Credit Cardholders' Bill of Rights goes further than the new rules promulgated by the Fed, OTS and NCUA by:

Empowering cardholders to set their own limits on their credit

Prohibiting the marketing of cards to minors

Allowing consumers to reject a card before activation without harming their FICO score

Requiring issuers to provide more data to allow better regulatory oversight of the industry

The ultimate effect of deflation is to reduce the supply of money and credit. Your goal is to make sure that it doesn't reduce the supply of your money and credit. The ultimate effect of depression is financial ruin. Your goal is to make sure that it doesn't ruin you.

Many investment advisors speak as if making money by investing is easy. It's not. What's easy is losing money, which is exactly what most investors do. They might make money for a while, but they lose eventually. Just keeping what you have over a lifetime of investing can be an achievement. That's what my book, Conquer the Crash, is designed to help you do, in perhaps the single most difficult financial environment that exists.

Protecting your liquid wealth against a deflationary crash and depression is pretty easy once you know what to do. Protecting your other assets and ensuring your livelihood can be serious challenges. Knowing how to proceed used to be the most difficult part of your task because almost no one writes about the issue. My book remedies that situation. [more...]

Friday, December 12, 2008

It is in the national interest of the United States to preserve what is left of our manufacturing capacity. Accordingly, it is a proper use of the public purse to help save our automakers from dissolution. They are not beyond redemption; however, a few key steps need to be taken for the infusion of public funds to make these companies viable in the long run. Our politicians say as much; however, there has been a lack of understanding of the root cause of Detroit's problems as well as a lack of a comprehensive plan to turn the Big Three around. Below is a brief outline on how this can be achieved. [more...]

Who is going to be buying cars? Answer to that: very few. So bail out the auto industry - and it will happen - and they will find themselves right back in the trough again because they can't sell as many cars as they once did. Do we really think people are going to be traveling all over? No, they can't afford to and wait until the credit card companies cut up to 40% of the available credit of consumers. The consumer is already cut off from home equity, refinancing, and will emerge regardless of bailouts hobbled at best. Well, what does that do to the consumption economy businesses depend on? Yes, a car wreck no matter what.

I use the car wreck analogy because as businesses like the auto industry, which is topical, are bailed out, even if you and I don't agree, the consumer certainly isn't going to be out buying cars and, worse, many just can't. Consumers now suffer from 30-60-90-120 day lates on their credit reports. Consumers are unemployed and with an Obama program of "Great Works," the consumers supporting the economy will find themselves under-employed even if they go build bridges and roads. May be great for job numbers and political equity, but overall for the economy it will fail to meet the massive waves of chaos that have hit our shores and will continue to drown many industry sectors. [more...]

Tuesday, December 9, 2008

There's no question that Elliott Wave International's Conquer the Crash foresaw and explained every chapter of today's financial crisis, years in advance - including the stock plunge, the housing collapse and subprime debacle, the liquidity crisis, the Fed's failures, and lots more. The unsettling part is how much of Robert Prechter's book includes chapters about what is yet to come. Updated for 2009, a CD-ROM supplement and free Readers-Only Web page ensures the book's message never goes out of date.More...

And now Robert Prechter is available for interviews. Call Sandy and schedule now for all the latest financial analysis! More on Robert...

Monday, December 8, 2008

Most people work hard for their money. And I'm not only talking about your average guy who goes to the office and works 9 to 5 in front of a computer screen; I'm specifically talking about the guys and gals who are working the auto factory lines in places like Detroit and Toledo - these are the first people who will be affected by Big 3's plea for billions of dollars. Why? Because while the corporate CEOs line their pockets with the bailout money, the lowest people on the totem pole will get a cut in their salaries - even worse, a pink slip out the door. This is outrageous! The correct answer would be to ignore the Big 3's pleas for money but unfortunately our country needs GM, Chrysler and Ford to keep our economy afloat. What we don't need are CEOs borrowing money to fly private jets while making tens of millions of dollars a year on the backs of hard working Americans.

My call to action: Federal Government - give the Big 3 a much needed bailout. We need a surge in America's economy, we need jobs, and we need Americans to feel confident in our economy once more. What we also need is oversight - massive oversight - and strict regulations associated with the bailout. No employee of GM, Ford or Chrysler should be making more than the President of the United States. Salaries need to be capped and bonuses need to be restricted. Also, 1% of the bailout money should be used to develop a prosecutorial office devoted to bringing the people responsible for wasteful and needless spending. These corporate giants have proven that they need a babysitter that would be better than Big Brother himself. [more...]

Wednesday, December 3, 2008

Where is the Outrage? - Where is the Media? Where is Common Sense? Where is the Investigation? The media sent a small army to Alaska to dig up dirt on Sarah Palin when she was nominated to run for VP. Henry Paulson is bankrupting America in order to bailout his buddies on Wall Street and foreign bankers, and the mainstream media couldn't care less. Is this a nightmare or a comedy skit? AIG had nearly $500 billion in toxic credit default insurance liability. 3/4ths of the liabilities were European bankers. Paulson hands the European banker's problem to the American taxpayers. Thanks Henry! [more...]

Monday, December 1, 2008

Last week's Bloomberg News report that the Federal Reserve had pledged/backed up/loaned $7.6 trillion - yes, that is trillion - to shore up our faltering national economy opened a whole new set of previously unanswered questions:

• How much money does the Fed have?

• Where is it?

• What backs it up? Gold? Treasury Bills? What?

• Where does it come from? These are not tax dollars appropriated by the Congress - so where do these massive funds - equal to half the annual GDP - come from?

• Who controls these funds? Do we, the American People, have any direct say in what happens to these funds? [and more...]

Too big to fail! We have heard this time and time again. Through the history books we heard the same story about the Titanic. Industry after industry keeps running aground as the government continues to bail water out of the sinking ships. How do we save the ship when the life rafts have already been used? What’s next? Pensions, hedge funds, retailers, airlines! How can the U.S. keep printing and borrowing money to plug the leaks stay afloat? IT CAN'T. The collapse of the U.S. economy is upon us; the ship hit a mortgage iceberg first, then insurance, and keeps ripping the hull at every turn. Bush was right to call Wall Street drunk (and I throw in politicians, too). Remember Exxon Valdese? The people steering our economic ship were drunk and now even hung over, their heads are not screwed on right. while government believes bailing out companies that are too big to fail (like AIG) we all sit in the second and third decks locked in like rats, powerless to do anything but drown. The bread lines we are so familiar with that represented people during The Great Depression have been replaced by companies and entire industries. Everyone is looking to get a handout, bailout, some way out. But government is not the answer. [more...]

Thursday, November 20, 2008

Bailout after bailout of big industry won't help if Americans can't or won't consume their products. A depression is looming over America. Recession is already upon us and Americans' inability to afford their current debts and, worse, companies' inability sell goods to them will exasperate the economic woes. Regardless of the American people's vote, the bailout of big businesses will continue, although I suspect overwhelmingly voters would choose bailing out themselves too. Why is this a good idea? Much of the trouble with banks, auto manufacturers and definitely retailers to come is that consumers are strapped with debt, having lines of credit and credit cards cut off and can't squeeze any money out to support the industries being bailed out. This should be at the core of the bailout. My solution calls for a converged strategy where consumers get a cash infusion and loans are provided to failing companies. The convergence occurs when consumers clean up their balance sheets so big business won't have so many bankruptcies and defaults - the core of the problem - while businesses shore up their balance sheet while assuring more spending in the future that is necessary to bolster sales. [more...]

I have a question for you. When I hire someone, I want to know about their skills and experience for the job for which they're applying. So, America thinks Obama can fix this mess? With what? Voodoo? How can he solve a business problem, when he knows absolutely nothing about business? In the 25 years since we graduated Columbia University Class of '83 together, Obama has never started a business, run a business, or risked his money on a business deal. Not once in 25 years. During the campaign, he talked about creating millions of jobs. Well, the next one he creates will be his first. Good luck with that.President-Elect Obama has never met a payroll, not to mention paying employee payroll taxes or health insurance. Yet his supporters, fans and voters think he holds the answers to a crumbling economy? I don't think he could run a bakery, let alone the U.S. economy. How frightening is this scenario? We're handing our country over to a man with no experience - no experience as a businessman, or as a government official - all because we dislike George W. Bush. America wanted ABB (Anything But Bush). [more...]

Bailouts Gone Wild!By Bill Porter

Like a loose hose that is out of control and wildly spraying everything within range, Henry Paulson is wildly spraying money (our money) on banks, insurance companies and who knows where else. The auto industry is just one of numerous industries that are elbowing their way to get into the bailout line. Like sharks smelling blood, now even cities (i.e., Philadelphia and Atlanta) are trying to fund their own mismanagement with federal handouts. Where will it end... or will it end? The absence of a comprehensive proposal that can realistically address the country's financial crisis allows the crisis to determine its own course. Leadership expert Bill Porter, who is the author of the startling new book Presidential Lessons Learned - Follow the Leader, asserts that George Bush is missing in action and that Barack Obama is out to lunch. The last five Democratic presidents all began their presidency with a huge Democratic majority in both the House and the Senate. Only two have been able to capitalize on that extraordinary opportunity! Why? Bill's new book answers that critical question. Let Bill tell your listeners why! [more...]